The Future of Innovation

The Future Of Innovation ... The Benefits Of Being Realistic

Dr Claudia Loebbecke

Innovations in the era of co-opetition: benefitting from being realistic

Most authors agree on the undoubted value and importance of innovation. The book is full of so encouraging statements that innovation is necessary, feasible, and promising - no progress and no success without innovations! Complementing this view and vision, we would like us to think also a bit 'down to earth'.

Innovation is important not only for life and the well-being around the world, but also for economic ambitions. In the following, we limit myself solely to innovations in competitive environments with brought to markets by players who aim at economic success.

We do not follow the argument of free sharing because technologies allow to do so. In spite of all the visions of knowledge and innovation sharing for the better of all, we cannot deny the era and the conceptual ubiquity of co-opetition, the simultaneous cooperation and competition.

How do organizations develop innovations in such environments? Innovations are often the visible result of 'applying' barely visible knowledge. There is only a small step between innovations and knowledge. Innovations result from creating, managing, sharing, combining, and exploiting knowledge. Who has the better knowledge? Who makes the most out of their knowledge to create innovations and to be successful?

The needed knowledge sets a fundamental competitive requirement in many industries; especially in knowledge-intensive industries, it has become increasingly complex and costly to achieve. Organizations increasingly face the challenge of appropriate cost-effective knowledge creation and subsequent knowledge absorption. They participate in inter-organizational knowledge networks to create the required knowledge, to achieve cost-effective access to specialized knowledge, and thus to trigger innovations. Why and how do organizations initiate or get involved in such inter-organizational endeavors despite potential competitive counterarguments?

We have investigated more than twenty organizations in several industries for their strategic approaches in order to cope with the inevitable difficulties of inter-organizational knowledge creation and innovation:

In times of increasingly innovation-driven and knowledge-intensive businesses and fragmented knowledge fields -- even if accepting coopetitive contexts -- inter-organizational knowledge creation and management becomes inevitable. Organizations participate in such inter-organizational knowledge networks to benefit from specialization in knowledge creation and to share cost with other organizations. As knowledge cannot simply be transferred in a transactional sense, organizations send experts to interact with external knowledge creation agents. They select experts with a similar background as the knowledge creation agents in order to facilitate a common formative context and allow for proper understanding and interpretation of knowledge and thus ease transfer and absorption.

However, inter-organizational creation and management almost implicitly brings up the less popular, but unavoidable issues of coopetiton. Ignoring issues of knowledge leaking and losing competitive potentials from sharing to freely, is naïve. Knowledge and the potential for innovation are relevant, perhaps the most relevant competitive resources, which no organization can share freely in its striving for economic success.

Active and strategic management of inter-organizational knowledge sharing and innovation development processes becomes crucial for successfully harvesting the economic potential of one's the most relevant resources.